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Ruling
Subject: Residence
Question and answer
Are you a resident of Australia for tax purposes?
Yes.
This ruling applies for the following periods:
Year ending 30 June 2013
Year ending 30 June 2014
Year ending 30 June 2015
Year ending 30 June 2016
The scheme commenced on:
1 July 2012
Relevant facts and circumstances
Your county of origin is Australia.
You are a citizen of Australia and the foreign country.
You and your spouse live on a vessel.
You travel to various countries around the world.
You return to Australia once a year for a few weeks.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1936 Subsection 6(1)
Reasons for decision
Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source.
The terms 'resident' and 'resident of Australia', in regard to an individual, are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes.
The domicile test is the most relevant test in your situation.
Under the domicile test, a person is a resident of Australia for tax purposes if their domicile is in Australia, unless the Commissioner is satisfied that their permanent place of abode is outside of Australia.
Domicile
Domicile is a legal concept, determined according to the Domicile Act 1982 and common law rules established by private international law cases.
Domicile is the place that is considered by law to be your permanent home. It is usually something more than a place of residence.
Your domicile is Australia because you were born in Australia and you are an Australian citizen.
Permanent place of abode
It is clear from the case law that a person's permanent place of abode cannot be ascertained by the application of any hard and fast rules. It is a question of fact to be determined in the light of all the circumstances of each case.
The courts have considered a person's 'place of abode' is where they consider 'home'. In R v Hammond (1982) ER 1477, Lord Campbell CJ stated that "a man's residence, where he lives with his family and sleeps at night, is always his place of abode in the full sense of that expression."
A place of abode must exhibit the attributes of a place of residence or a place to live, as contrasted with the overnight, weekly or monthly accommodation of a traveller.
In your case the Commissioner is not satisfied that you have a permanent place of abode outside of Australia as you stay on a boat and travel to different locations.
Therefore, you are a resident of Australia under this test. As you are a resident under the domicile test, the other three tests do not need to be considered.
Your residency status
As you are a resident of Australia for tax purposes, according to section 6-5 of the ITAA 1997, your assessable income includes income gained from all sources, whether in or out of Australia.